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What’s New Under current law, definitions used in determining Minnesota taxable income are based on the Internal Revenue Code, as amended through December 31, 2018. Since that date, Congress has enacted the following:

• Taxpayer Certainty and Disaster Tax Relief Act (TCDTR) of 2019• Families First Coronavirus Response Act (FFCRA) of 2020• Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020• Paycheck Protection Program Flexibility Act (PPPFA) of 2020

These acts contain changes affecting businesses for tax year 2019. Because Minnesota has not adopted these federal changes, adjustments are required to correctly determine your Minnesota taxable income. Use the updated instructions on pages 8, 9, and 16-18 to calculate nonconformity adjustments relating to the TCDTR, FFCRA, CARES Act, and PPPFA.

If you amended your 2019 federal return solely due to the TCDTR, FFCRA, CARES Act, or PPPFA your Minnesota adjustment will offset the change to your federal taxable income. For these amended returns, write “TCDTR”, “FFCRA”, “CARES Act”, and/or “PPPFA” (all that are applicable) in red at the top of the Minnesota Form M4X.

Business Interest Expense LimitationIRC section 163(j) limits the deduction for business interest expense. The limitation applies to entities within the Minnesota combined group, which may or may not be the same as the federal consolidated group. See instructions on pages 5, 8, and 18.

Revenue NoticesRevenue Notices are policy statements that provide interpretation, details or supplementary information concerning Minnesota state tax laws or rules. Recently released Revenue No-tices regarding corporation franchise tax include:• 17-12 Corporate Franchise Tax – Sales Factor – Transactional Taxes on Gross Receipts• 17-09 Corporate Franchise Tax – Net Operating Loss Carryforwards – Sinclair Broad

Grp., Inc. v. Comm’r of Revenue. For a complete list of revenue notices and to downloadcopies, go to our website at www.revenue.state.mn.us.

Filing RequirementsCorporations must file a Minnesota tax return if they transact business or own property in Minnesota, regardless of their state of incorporation.

FormsWhich Form Should You File?Most corporations, other than S corporations, file Form M4, Corporation Franchise Tax Return.

S corporations filing federal Form 1120S must file Minnesota Form M8, S Corporation Return.

Nonresident entertainers file Form ETR, Nonresident Entertainer Tax.

Exempt organizations file Form M4NP, Unrelated Business Income Tax Return. Exempt organizations include: • exempt organizations with unrelated business income and organizations liable for proxy

tax on lobbying and political expenditures that file federal Form 990-T• farmers’ cooperatives, as defined in IRC section 521, that file federal Form 1120-C• homeowner associations filing federal Form 1120-H• political organizations filing federal Form 1120-POL

Unit investment trusts. A unit investment trust, as defined in the Investment Company Act of 1940, is not considered a person, corporation, partnership, trust or investment company for Minnesota income tax purposes if it: Continued

2019 Minnesota Corporation Franchise TaxIncludes Instructions for Forms M4, M4I, M4A, and M4T.

ContentsWhat’s New. . . . . . . . . . . . . . . . . . . . . . . . 1Revenue Notices . . . . . . . . . . . . . . . . . . . . 1Filing Requirements . . . . . . . . . . . . . . . . . 1Before You File . . . . . . . . . . . . . . . . . . . . . 1Which Form Should You File? . . . . . . . . . 2Due Dates and Extensions . . . . . . . . . . . . 2Payment Options . . . . . . . . . . . . . . . . . . . 3Filing Reminders . . . . . . . . . . . . . . . . . . . . 3 Accounting Period When Completing Your Return Early Audits/BankruptcyAmending Your Return . . . . . . . . . . . . . . 4Unitary Businesses . . . . . . . . . . . . . . . . 4-5Definitions . . . . . . . . . . . . . . . . . . . . . . . . 5Instructions for: M4 – Summary Page . . . . . . . . . . . . . 6-7 M4I –Income Calculation. . . . . . . . . 8-11 M4A –Apportionment and Minimum Fee . . . . . . . . . . . . . . . . . 12-14

Financial Institutions. . . . . . . . . . . . . . 14 M4T –Tax Calculation. . . . . . . . . . . . . . 15Federal Adjustments. . . . . . . . . . . . . .16-18

Questions?You can find forms and information, including answers to frequently asked questions and options for filing and pay-ing electronically, on our website at:www.revenue.state.mn.usSend us an email at: businessincome.tax@state.mn.usCall us at 651-556-3075

Need Forms?Go to www.revenue.state.mn.us.This information is available in alternate formats.

Before You FileComplete Your Federal ReturnBefore you complete Form M4, complete federal Form 1120 and supporting sched-ules. You will need to reference them.Minnesota Tax ID NumberYour Minnesota tax ID is the seven-digit number you’re assigned when you register with the department. Generally, this is the same as your sales and use tax or Minne-sota employer’s withholding tax number.It’s important to include your Minnesota tax ID on your return so that any payments you make are properly credited to your account.If you don’t have a Minnesota tax ID, ap-ply for one online at www.revenue.state.mn.us and type Business Registration in the search box or call 651-282-5225 or 1-800-657-3605.

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• issues periodic payment plan certificates• has assets consisting mostly of a single management company’s securities• has no power to invest in other types of securities

If a trust meets these conditions, no return needs to be filed. Each holder of an interest in the trust is considered to own a proportionate share of the assets and must report any distributions on their individual income tax return.

Real estate mortgage investment conduits (REMICs), valid under IRC section 860D[b], are not required to file a return. Holders of an interest in a REMIC must report their share of income or loss on their individual income tax returns.

Captive Insurance CompaniesA captive insurance company is a company that is licensed as a captive insurance company, or derives less than 50 percent of its total premi-ums for the taxable year from sources outside the unitary business.

Unless disqualified, captive insurance companies are not subject to the Minnesota corporate franchise tax and are not part of the Minnesota combined group. They are not required to file an income tax return.

Disqualified Captive Insurance CompaniesA disqualified captive insurance company is a captive insurance company that:

• Pays less than 0.5 percent of its total premiums for the tax year in tax under IRC section 297I or a comparable tax of another state, OR • Receives less than 50 percent of its gross receipts in the tax year from premiums.

Disqualified captive insurance companies are required to file a corporate franchise tax return as part of the Minnesota combined group.

Software-Generated FormsIf you use tax preparation software, the information must be in the same format as our own forms and schedules. If it’s not in the same for-mat, the forms and schedules will be returned to you for correction.

Due Dates and ExtensionsWhen is the Return Due?Returns, including short-year returns, must be filed by the due date for filing your federal income tax return.

The U.S. postmark date, or date recorded or marked by a designated delivery service, is considered the filing date (postage meter marks are not valid). When the due date falls on a Saturday, Sunday or legal holiday, returns postmarked on the next business day are considered timely. When a return is filed late, the date it is received at the department is treated as the date filed.

The regular due date for returns filed by cooperative associations (other than IRC section 521 organizations) is the 15th day of the ninth month after the end of the calendar or fiscal year. Check the co-op box at the top of Form M4.

If You Need an ExtensionAll corporations are granted an automatic seven-month extension to file Form M4. You are not required to submit a form to Minnesota to receive the seven-month filing extension.

If the Internal Revenue Service (IRS) grants an extension of time to file your federal return that is longer than the Minnesota automatic seven-month extension, your state filing due date is extended to the federal due date.

This is a filing extension only, not a payment extension. Any tax not paid by the regular due date is subject to penalties and interest (see instructions for lines 11 and 12 on page 6-7).

To pay your extension payment electronically, see “Paying Electronically” on this page. If you make your extension payment by check, visit our website at www.revenue.state.mn.us and click on “Make a Payment” and then “By check” to create a voucher. (Do not use a voucher if you’re making your extension payment electronically.)

PaymentsUnitary businesses: Payments must be made under the designated filer. See “Filing a Combined Return” on pages 4-5.

Paying ElectronicallyIf, during the 12 months ending June 30 of the tax year, you paid $10,000 or more in estimated tax payments, you are required to make all future estimate tax payments electronically beginning January 1 of the following tax year. Once you meet the electronic payment threshold, you are required to pay electronically for all future periods.

You must also pay electronically if you’re required to pay any Minnesota business tax electronically, such as sales or withholding tax. See Pay-ment Method under line 11 Penalty on page 6.

General Information

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Estimated PaymentsIf your estimated tax is more than $500, you must make quarterly payments based on the entire estimated amount. Payments are due by the 15th day of the third, sixth, ninth and 12th months of the tax year. You can make your payments electronically or by check by creating and printing a voucher on our website at www.revenue.state.mn.us. For additional information, see Corporation Estimated Tax Instructions.

Tax Return PaymentIf there is an amount due on line 14 of Form M4 and you are not required to pay electronically, you may pay by check by creating and print-ing a voucher on our website at www.revenue.state.mn.us.

Filing RemindersAccounting PeriodYou must use the same accounting period for Minnesota as you use for your federal return. If you change your federal accounting period, at-tach a copy of federal Form 1128, Application to Adopt, Change or Retain a Tax Year, to your short-period Minnesota return.

When Completing Your Return• Enter the beginning and ending dates of your tax year at the top of Form M4.• Round amounts to whole dollars. Drop amounts less than 50 cents and increase amounts 50 cents or more to the next higher dollar.• How to assemble paper filed returns. Assemble schedules in the order completed behind your Form M4. Attach any additional informa-

tion requested and a copy of all forms and schedules filed with the IRS for the tax year, including federal Forms 1120-FSC. Be sure to in-clude copies of all supporting schedules, except for federal Forms 1118, 1122, 3115, 5471, 5472 and 5713. Your Minnesota tax return will not be considered complete unless all required federal returns are attached. We will accept the federal return in PDF format on a Compact Disc.

• Where to file paper returns. Mail Form M4 and all completed Minnesota and federal forms and schedules using a mailing label (see page 15).

• Corporate partners. Attach a copy of Schedule KPC, Partner’s Share of Income, Credits and Modifications.• If this is your final return, check the correct box at the top of Form M4. Attach an explanation and a copy of merger papers, dissolution

date and distribution papers, or, for S corporations, a copy of your federal approval. • If your M4 return shows a refund, Minnesota law requires you to provide your banking information so that your refund can

be deposited electronically.

Early Audits/Bankruptcy To request an early audit or notify the department of bankruptcy proceedings, complete Form M22, Request for Early Audit of Minnesota Income Tax Returns. If the corporation is in bankruptcy, check the “in bankruptcy” box at the top of Form M4.

General Information (continued)

Payment OptionsIf you’re required to pay any Minnesota business tax electronically, you must pay all taxes electronically. A 5 percent penalty will be assessed if you fail to do so when required.

Pay Electronically one of the following ways: • Go to www.revenue.state.mn.us and log in • Call 1-800-570-3329 to pay by phone

To be timely, you must complete your transaction and receive a confirmation number on or before the due date for that payment. You can cancel a payment up to one business day before the scheduled date, if needed. When paying electronically, you must use an account not associated with any foreign banks.

If you’re using the system for the first time and need a temporary password, call 651-282-5225 or 1-800-657-3605.

Pay by Credit or Debit CardFor a fee, you can use your credit or debit card to make a payment through Value Payment Systems, a national company that partners with fed-eral, state and local governments to provide credit and debit card payment services.

To do so: • Go to payMNtax.com • Call 1-855-9-IPAY-MN to pay by phone.

The Department of Revenue does not have any financial agreement with Value Payment Systems and does not receive any of its fees.

Pay by Check • Go to our website at www.revenue.state.mn.us and click on Make a Payment. • Click By Check to create and print a payment voucher. Write your check to Minnesota Revenue and mail together to the address on the

voucher.Your check authorizes us to make a one-time electronic fund transfer from your account. You may not receive your cancelled check.

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Amending Your ReturnUse Form M4X, Amended Franchise Tax Return/Claim for Refund, to report changes to your Minnesota liability or to claim a refund.

If the IRS changes or audits your federal return or you amend your federal return and it affects your Minnesota return, you must amend your Minnesota return. File Form M4X within 180 days after you were notified by the IRS or after you filed your federal amended return. Enclose a copy of the IRS report or your amended federal return with your amended Minnesota return.

If you amended your 2019 federal return solely due to the TCDTR, FFCRA, CARES Act, or PPPFA write “TCDTR”, “FFCRA”, “CARES Act”, and/or “PPPFA” (all that are applicable) in red at the top of the Minnesota Form M4X. For more details, see pages 16 through 18.

If the changes do not affect your Minnesota return, you have 180 days to send a letter of explanation to the department. Send your letter and a complete copy of your amended federal return or the correction notice to:

Minnesota Revenue Corporation Franchise Mail Station 1255600 N. Robert Street St. Paul, MN 55146-1255 Do not send these with your current tax return.

If you fail to report federal tax changes within 180 days, you are subject to a penalty equal to 10 percent of any additional tax due. In addi-tion, the period of time increases during which we may make adjustments to your Minnesota return.

Unitary BusinessesBelow are guidelines for corporations whose activities are part of a unitary business.What is a Unitary Business?“Unitary business” means business activities or operations that result in a flow of value and includes both foreign and domestic companies. A business is presumed to be unitary whenever there is unity of ownership, operation, and use. Unity is also presumed when business activities or operations are of mutual benefit, dependent upon or contributory to one another, either individually or as a group.

Unity of ownership exists when a corporation is a member of a group of two or more corporations and more than 50 percent of the voting stock of each member is directly or indirectly owned by a common owner, either corporate or noncorporate, or by one or more of the member corporations of a unitary business.

Unity of operation and use can be shown by centralized management or executive force; or centralized purchasing, advertising, accounting or other controlled activity.

The absence of these centralized activities does not necessarily mean that a business is not unitary. A business is unitary if there is functional integration, centralized management and economies of scale (MN Rule 8019.0100, subdp. 2a.B).

Filing a Combined ReturnA unitary business must file a combined return. A combined return for Minnesota includes domestic corporations and disqualified captive insurance companies. A combined return does not include regulated investment companies. A combined return also includes foreign entities, other than those treated as C corporations for federal income tax purposes, which are included in the federal taxable income of the unitary business. Foreign corporations which are treated as C corporations for federal income tax purposes and regulated investment companies that have nexus with Minnesota, even if they are part of a unitary business, must file separate tax returns (see Definitions below).

One member of the unitary business must be selected as the designated filer to file the return, make payments, receive refunds, and represent the other members of the group in tax matters.

If you are filing a combined return, complete Schedule AFF, Affiliations for Combined Returns, and attach it to your return.

Using the Combined-Income Method The combined-income method uses single-sales factor apportionment to determine what percentage of the combined business income of a unitary business is reportable to Minnesota by each unitary business member required to file a Minnesota return.

The apportionment factor for each member is determined by dividing the corporation’s sales or receipts attributable to Minnesota by the total sales of the entire group, both in and outside Minnesota.

Income and deductions from transactions between members included in the combined return are eliminated to avoid distortion of the group’s income or of the sales apportionment factor.

The interest expense limitation under IRC 163(j) must be computed using the combined report entities included in the unitary group. The limitation must be aggregated between combined report entities consistent with the application to a consolidated group for federal income tax purposes.

For all members of a unitary business, sales or receipts attributable to Minnesota and made by any member that doesn’t have nexus with Min-nesota must be included in the Minnesota sales reported by a member of the group which does have nexus with Minnesota.

Continued

General Information (continued)

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If a corporation is part of a unitary business, the entire income (loss) derived from the trade or business of the unitary business is used to figure how much income or loss should be apportioned and reported by that corporation on the combined Minnesota tax return. Income not derived from the trade or business is assigned to Minnesota or another state.

To determine the income (loss) from Minnesota sources for each member of the group, the total apportionable income (loss) of the entire group is multiplied by the apportionment factor of each member.

None of the apportionable income of a unitary business will be considered derived from any particular source or place except as determined by using the combined income method.

Common Accounting PeriodsThe combined-income method for a group of related corporations requires the income and sales factors of all corporations be determined on the basis of a common accounting period.

If the members have different accounting periods, the income and sales factor computations of all members should be computed for the same period as the designated filer’s normal accounting period (MR 8019.0405, subp. 4).

The due date of the return is still determined according to the actual accounting period of the designated filer filing the Minnesota return.

Estimated TaxMembers of a unitary business must compute the estimated tax using the combined-income method. Estimated tax payments must be made by the designated filer only.

General Information (continued)

DefinitionsNexusCorporations that are required to file a Minnesota tax return are referred to as having nexus with Minnesota.

Designated FilerA unitary business filing a combined return must select one of its members to be the designated filer.

The designated filer’s name and tax ID numbers go on the face of the corporation franchise tax return and in the heading of Column B1 of each columnar schedule attached to the return. All payments (estimated, extension and tax return) will be made under the Minnesota tax ID number of the designated filer and any refunds will be issued to the designated filer.

Domestic CorporationAny corporation organized under the laws of the United States or any state, the District of Columbia or political subdivision of these, ex-cluding the Commonwealth of Puerto Rico or any possession of the United States. Domestic international sales corporations (DISCs), qualifying under IRC section 992(a), are also domestic corporations (MS 290.01, subd. 5).

Foreign CorporationA corporation that doesn’t meet the definition of a domestic corporation is a foreign corporation (MS 290.01, subd. 5a). A foreign corpora-tion which is taxed as a C corporation for federal income tax purposes and has nexus with Minnesota must file a separate return.

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Complete Forms M4I, M4A, M4T and applicable schedules before completing Form M4. You must include these forms with your M4 return.Name and Address of CorporationUnitary businesses fill in the name of the designated filer (see “Filing a Combined Return” on page 4-5). Enter the mailing address associated with corporate tax matters.

Check box for Public Law 86-272Check this box to indicate you are claiming to be exempt from Minnesota corporate franchise tax under Public Law 86-272.

Line InstructionsCorporate partners: Include amounts have received as a partner in a partnership that is reported on Schedule KPC. Include Schedule KPC with your return.

Line 2—Minnesota Nongame Wildlife Fund You can help preserve Minnesota’s rare and endangered animals and plants by donating to this fund. Your donation will be added to your total tax and will decrease your refund or increase your balance due.

For more information, go to the Minnesota Department of Natural Resources website at www.dnr.state.mn.us.

Line 4—Enterprise Zone CreditYou may be eligible for the refundable Enterprise Zone Credit if your business has been approved by the Minnesota Department of Employ-ment and Economic Development (DEED) as employment property in an enterprise zone. Attach the certification document received from the DEED.

For more details about the zones, go to the DEED website at mn.gov/deed/.

Line 5—Historic Structure Rehabilitation CreditYou may be eligible for the Minnesota Historic Structure Rehabilitation Credit if all of the following apply:

• You made qualified improvements to a certified historic structure in Minnesota.• The improvements qualify for the federal Historic Rehabilitation Credit under IRC section 47.• You applied for certificate to the Minnesota State Historic Preservation Office (SHPO) before starting the project. • SHPO issued a credit certificate upon the project’s completion.

On line 5, enter the National Park Service (NPS) project number from the credit certificate you received from SHPO, and:

• The credit amount shown on the credit certificate if the initial application for allocation certificate was submitted to SHPO on or before December 31, 2017.

• One-fifth of the credit amount shown on the credit certificate if the initial application for allocation certificate was submitted to SHPO after December 31, 2017.

Include the credit certificate you received from SHPO when you file your return.

For details about the Minnesota and federal credits, go to the SHPO website at mn.gov/admin/shpo.

Line 11—PenaltyPenalties are collected as part of the tax and are in addition to any additional charge for underpaying estimated tax.

Late payment. A penalty is due if you don’t pay at least 90 percent of your total tax by the regular due date. The penalty is 6 percent of the unpaid tax on line 10.

There is no penalty if at least 90 percent of your total tax is paid by the regular due date, and any remaining balance is paid by the extended due date. You must calculate interest on the remaining balance.

Late filing. If you file after the extended due date and owe tax, you must pay an additional penalty for filing late. The late-filing penalty is 5 percent of the unpaid tax on line 10.

Balance not paid. An additional penalty of 5 percent of the unpaid tax is due if the return is filed after the regular due date with a balance due, and that balance is not paid at the time of filing.

Payment method. If you do not pay electronically when required, an additional 5 percent penalty applies to payments not made electroni-cally.

Other Penalties. There are also civil and criminal penalties for intentionally failing to file a Minnesota return, evading tax, and for filing a frivolous, false, or fraudulent return.

M4 Summary

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Line 12—Interest You must pay interest on the unpaid tax plus penalty from the regular due date until the total is paid. To figure how much interest you owe, use the following formula with the appropriate interest rate (the rate for 2020 is 5 percent):

Interest = (tax + penalty) x # of days late x interest rate ÷ 365

Line 13—Additional Charge for Underpayment of Estimated TaxIf you did not pay the correct amount of estimated tax by the due dates, you may have to pay an additional charge for underpayment of esti-mated tax.

If your tax on Form M4, line 1 (less any credits on lines 4 and 5), is more than $500, use Schedule M15C, Additional Charge for Underpay-ment of Estimated Tax, to figure the additional charge or to show that you qualify for an exception. Attach Schedule M15C to your return.

Line 15If line 9 is less than the sum of lines 3 and 13, subtract line 9 from the sum of lines 3 and 13. Enter the result on line 14 and enter zero on line 15.

Signatures The return must be signed by a person authorized by the corporation. If you paid someone to prepare your return, the preparer must also sign and provide their Preparer Tax Identification Number (PTIN) and phone number. Check the box if you want to authorize the department to discuss this return with the preparer.

Checking the box does not give your preparer the authority to sign any tax documents on your behalf or to represent you at any audit or appeals conference. For these types of authorities, you must file Form REV184b, Business Power of Attorney, with the department.

M4 Summary (continued)

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Line 1a—Federal Taxable Income Before NOL and Special Deductions Use the line references below to figure the amount to enter from your federal return.

If the amount you enter on line 1a does not match the amount listed on your federal return, complete Schedule REC, Reconciliation, and at-tach it to your M4 return.

If you’re filing federal Form: Enter amount from line: 1120 28 1120-F 29, Section II 1120-FSC 18, Schedule B 1120-IC-DISC 5 1120-ND 10 1120-RIC 26* 1120-REIT 22 + 21a 1120-C 25c*1120-RIC: For Minnesota purposes, the federal taxable income of a regulated investment company must be increased by the net capital gain exclusion provided in IRC section 852(b)(2)(A). The dividend paid deduction must be applied by allowing a deduction for capital gains divi-dends and exempt interest dividends (IRC sections 852[b][3][C] and 852[b][5]). This also applies to any undistributed capital gains which are elected to receive IRC section 852(b)(3)(D) treatment.

Unitary BusinessesBecause of differences in federal and state law, the amount on line 1a may not match the amount listed on your attached federal return. If it doesn’t match, complete Schedule REC, and attach it to your M4 return.

For example, line 28 on a consolidated Federal Form 1120 might not include income from companies that are part of a Minnesota combined return. Line 1a must include the income of those companies that meet the Minnesota definition of a unitary business but are not included on line 28 on a consolidated Form 1120.

The consolidated Form 1120 does not include income from less-than-80-percent-owned companies. Minnesota’s definition of a unitary business only requires greater than 50 percent ownership.

Federal Form 1120, line 28, may include income from the following companies that should not be included on line 1a.

• Insurance companies that are not disqualified captive insurance companies.• Investment companies• Mexican and Canadian companies included in the federal consolidated return under provision 1504d of IRC.• Non-unitary companies. These are members that don’t meet the definition of a unitary business.

Line 1b—Interest Expense LimitationThe interest expense limitation under IRC section 163(j) must be aggregated between the Minnesota combined report entities consistent with the application to a federal consolidated group for federal income tax purposes. The tax attributes of the entities not included in the Minne-sota combined group may not be included when determining the Minnesota limitations.

If your Minnesota combined group is different than your federal consolidated group, you may have to make an adjustment for interest ex-pense limitation for Minnesota purposes. Use the federal Form 8990 as a worksheet to recalculate the Minnesota interest expense limitation for your Minnesota combined report. Write “Minnesota” at the top of this Form 8990 (referred to as Minnesota Form 8990) and include it with your return.

Use a 30% limitation to calculate the interest expense limitation for Minnesota purposes. The CARES Act created a special rule increasing the amount of business interest that can be deducted for the tax year for federal purposes from 30% to 50%. The Minnesota limitation has not changed. See the nonconformity instructions on pages 16-18 for more information on the CARES Act and its impact on the Minnesota return.

If your interest expense allowable for Minnesota is more than your federal interest expense, enter the difference as a negative number on line 1b. If your interest expense allowable for Minnesota is less than your federal interest expense, enter the difference as a positive number on line 1b.

AdditionsLine 2Corporate partners. Include any addition amounts reported on the Schedule KPC you received from the partnership (include Schedule KPC with your return).

a. TaxesEnter the amount deducted on your federal return for taxes based on net income and related minimum taxes paid to Minnesota or another state, a political subdivision of a state, the District of Columbia, any U.S. possession or any foreign country. This also includes the Minnesota minimum fee. (MS 290.0133 subd. 2) Continued

M4I Income Calculation

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b. Capital LossesEnter any deduction for capital losses taken on your federal return under IRC sections 1211 and 1212. Include any loss from the sale or exchange of certain preferred stock which is treated as an ordinary loss for federal purposes under section 301 of the Emergency Economic Stabilization Act of 2008, Public Law 110-343, Division A, title III. (MS 290.0133 subd. 8 and 290.0136)

c. Exempt Interest IncomeEnter all interest income received that is not included on your federal return. (MS 290.0133 subd. 3)

d. Exempt Interest DividendsEnter all exempt interest dividends received (as defined in IRC section 852[b][5]) that are not included on your federal return. (MS 290.0133 subd. 4)

e. Losses From Mining OperationsEnter the amount of losses from mining operations (from Minnesota Form M30, Occupation Tax) if these losses are included in your federal taxable income before NOL and special deductions. For gains from mining operations, go to line 4g. (MS 290.0133 subd. 7)

f. Percentage DepletionEnter the amount of percentage depletion deducted on your federal return under IRC sections 611 through 614 and 291.(MS 290.0133 subd. 9)

g. Federal Bonus Depreciation AdjustmentIf you claimed a deduction for special depreciation allowance (bonus depreciation) under IRC section 168(k) for property placed in service after December 31, 2017, that deduction may need to be adjusted due to Section 2307 of the CARES Act before making this addition (see instructions on pages 16-18).

If you claimed a deduction for the special depreciation allowance (bonus depreciation) on lines 14 or 25 of federal Form 4562, include 80 percent of that amount on Form M4I, line 2g. Also include 80 percent of any bonus depreciation amount you received as a partner of a part-nership (include Schedule KPC).

Do not include in this adjustment bonus depreciation attributable to any IRC section other than section 168(k).

If an activity generating bonus depreciation also generates a loss that you are not allowed to claim in the taxable year, the addition is limited to 80 percent of the excess of the bonus depreciation claimed by the activity over the amount of the loss not allowed in the taxable year.

If you are claiming a suspended loss from 2001-2005 or 2008-2011 on your federal return that was generated by bonus depreciation, multiply that bonus depreciation by 80 percent and include the result on line 2g. (MS 290.0133 subd. 11)

h. Excess IRC Section 179 DeductionIf you claimed a deduction under IRC section 179 for property placed in service after December 31, 2017, that deduction may need to be adjusted due to Section 2307 of the CARES Act before making this addition (see instructions on pages 16-18).

If, during the year, your total investment in qualifying property was more than $200,000 or if you elected more than $25,000 in section 179 expensing, you must add back on your state return 80 percent of the difference between the expensing allowed for federal and Minnesota tax pur poses. (MS 290.0133 subd. 12)

If you completed federal Form 4562 to claim the section 179 expensing for federal tax purposes, you must complete lines 1 through 12 on a separate federal Form 4562, (referred to as Minnesota Form 4562 on the worksheet for line 6) to determine the amount you need to add back for Minnesota purposes. Write “Minnesota” at the top of this separate Form 4562 and include it with your return.

Recalculate line 12 of your Minnesota Form 4562 using the same information from your federal Form 4562 and the following modifications:

• Subtract $995,000 from line 1 of your federal Form 4562, and enter the result on line 1 of your Minnesota Form 4562.• Enter line 2 of federal Form 4562 on line 2 of your Minnesota Form 4562.• Subtract $2,350,000 from line 3 of your federal Form 4562, and enter the result on line 3 of

your Minnesota Form 4562.• Enter the information from lines 6 and 7 of your federal Form 4562 on lines 6 and 7 of your Minnesota Form 4562. However, if you have

section 179 expensing from a partnership, use the amount from line 9 of Schedule KPC instead of line 12 of federal Schedule K-1 (1065).• Enter line 10 of your federal Form 4562 on line 10 of your Minnesota Form 4562.• Recalculate lines 4, 5, 8, 9, 11 and 12 of your Minnesota Form 4562. The result on line 12 of Minnesota Form 4562 cannot be more than

line 1 of that form.

Continued

M4I Income Calculation (continued)

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Then complete the following worksheet to determine line 2h of Form M4I.

Worksheet for Form M4I, line 2h

1. Amount from line 12 from your federal Form 4562 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Line 12 of your Minnesota Form 4562 (see above) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Subtract step 2 from step 1 (if zero or less, enter 0) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Multiply step 3 by 80% (0.80). Enter here and on Form M4I, line 2h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SubtractionsLine 4Corporate partners. Include any subtraction amounts reported on the Schedule KPC you received from the partnership (include Schedule KPC with your return).

a. Tax RefundsInclude refunds of any taxes described on line 2a that are included on your federal return and were added back on your Minnesota return in prior years. (MS 290.0134 subd. 8)

b. Capital LossesEnter an amount for capital losses as allowed under IRC sections 1211 and 1212, except that for losses incurred in taxable years beginning af-ter 1986, there is no carryback allowed and the carryforward period is 15 years. Include any loss from the sale or exchange of certain preferred stock, which is treated as an ordinary loss for federal purposes under section 301 of the Emergency Economic Stabilization Act of 2008, Public Law 110-343, Division A, title III, but has been treated as a capital loss for Minnesota. (MS 290.0134 subd. 5 and 290.0136)

c. Sum of Select Federal Tax Credit ExpensesThe amount on line 4c includes the sum of expenses associated with the following federal tax credits. Attach a list naming the federal tax credit and the expenses associated with the credit.• Research expenses. Include any research expenses that are disallowed on your federal return due to claiming the federal research credit

under IRC section 280C(c), but only to the extent that they exceed your Minnesota research credit from Schedule RD, line 29. (MS 290.0134 subd. 11)

• Federal Work Opportunity Credit and/or the Indian Employment Credit. Include any salary expenses disallowed due to the federal Work Opportunity Credit under IRC section 51, and/or the Indian Employment Credit under IRC section 45A(a). (MS 290.0134 subd. 3 and 12)

• Disability access expenditures. Include any disability access expenditures that are not allowed to be deducted or capitalized on your fed-eral return due to claiming the federal credit under IRC section 44(d)(7). (MS 290.0134 subd. 10)

• Qualified railroad track maintenance credit. Include any qualified railroad track maintenance expenditures that are not allowed to be deducted on your federal return due to claiming the federal credit under IRC section 45G(a). This includes the amount of depreciation expenses you were not allowed for federal income tax purposes due to making a basis adjustment as a result of claiming the federal credit. (MS 290.0134 subd. 16)

d. Gross-up for Foreign Taxes Deemed Paid Enter the amount of gross-up for foreign taxes deemed paid added to gross income for federal income tax purposes required under IRC sec-tion 78. (MS 290.0134 subd. 2)

e. Interest and Expenses Include interest and expenses related to income exempt from federal tax, provided the income is taxable by Minnesota and the interest and expenses are disallowed as deductions on your federal return. (MS 290.0134 subd. 6)

f. Dividends Paid by National and State Banks to U.S. Government National and state banks only: Include any dividend paid to the U.S. government on the preferred stock of the bank owned by the U.S. government. (MS 290.0134 subd. 4)

g. Mining Companies Enter the amount of income or gain from mining operations (from Minnesota Form M30, Occupation Tax) if these gains are included in your federal taxable income before NOL and special deductions. (MS 290.0134 subd. 9)

h. Deduction for Cost DepletionInclude an amount of cost depletion for property on which percentage depletion was added back on line 2f. (MS 290.0134 subd. 7)

i. Subtraction for Prior Bonus Depreciation AddbackIf you added back 80 percent of the federal bonus depreciation in any of the last five years, enter one-fifth of the amount added back. (MS 290.0134 subd. 13)

M4I Income Calculation (continued)

Continued

11

j. Subtraction for Prior IRC Section 179 AddbackIf you added back 80 percent of the excess IRC section 179 deduction in any of the last five years, enter one-fifth of the add-back. (MS 290.0134 subd. 14)

k. Subtraction for Prior Addback of Discharge of Indebtedness IncomeInclude any discharge of indebtedness income from reacquisition of business debt which you elected to defer federally in a prior year. Include only to the extent that the income was included in net income in a prior year as a result of the addition under MS 2014 290.01 subdivision 19c, clause (16). (MS 290.0134, subd. 15)

l. Deferred Foreign Income (Section 965)Enter the deferred foreign income inclusion amount under IRC section 965(a) (from your federal Form 1120, Schedule C, Line 15, column (a)) for the taxable year.(NOTE: IRC section 965(c) special deduction is not included on the Minnesota From M4I line 1a.)

m. Global Intangible Low-Taxed Income (GILTI)Enter the amount of global intangible low-taxes income (GILTI) included in net income under IRC section 951A (from your federal Form 1120, Schedule C, Line 17, column (a)) for the taxable year. (NOTE: IRC section 250 GILTI special deduction is not included on the Minnesota Form M4I line 1a.)

n. Disallowed Section 280E Expenses of Medical Cannabis ManufacturersIf you are a medical cannabis manufacturer registered with the Minnesota Department of Health, you may subtract expenses that were not allowed for federal tax purposes under IRC section 280E. Enter the disallowed section 280E expenses on line 4n. (MS 290.0134, subd. 19)

Line 5—Intercompany Eliminations Attach a separate list explaining any duplication of income (loss) resulting from intercompany transactions and enter the amount on line 5. For example, if line 1a included $10,000 of dividends that were paid by one member to another, you would need to include that $10,000 on line 5. List any item of income as a positive amount and any item of loss as a negative amount.

Dividends received by an insurer’s parent company from an insurer that is qualified and licensed in Minnesota, which is a member of an insurance holding company system as defined in MS 60D.15 subd. 6, should also be eliminated on this line. Attach a separate list explaining any dividends received from a Minnesota licensed and qualified insurer, which is a member of an insurance holding company system.

For example, if line 1a included $10,000 of dividends that were paid by an insurer that is qualified and licensed in Minnesota, which is a member of an insurance holding company system, to include that $10,000 on Line 5. List any item of dividend income as a positive amount.

Line 8—Nonapportionable IncomeNonapportionable income is income that cannot be apportioned due to provisions of the United States Constitution. Nonapportionable income is allocated by assignment based on the type of property that gives rise to the income. Nonapportionable income must be reduced by the expenses incurred to generate the income.

Frequently used assignment rules are:• Income/gains from tangible property not employed in the trade or business is allocated by assignment to the state in which the property is

located.• Gain on the sale of a partnership interest not employed in the trade or business is allocated to Minnesota in the ratio of the original cost of

partnership tangible property located in Minnesota to that located everywhere as determined at the time of the sale. If more than 50 percent of the value of the partnership’s assets are intangibles, the gain/loss is allocated to Minnesota using the partnership’s prior year sales factor.

Other assignment rules are in MS 290.17, subd. 2. Income not assigned in any particular manner is allocated by assignment to the taxpayer’s state of domicile.

All other types of income are referred to as business income, and are subject to apportionment.

If you are a corporate partner, include any nonapportionable income you received on line 2 of Schedule KPC.

M4I Income Calculation (continued)

12

Minnesota uses a single-sales factor to determine the apportionment percentage. The minimum fee is calculated using property, payroll, and sales factors. Column A reports everywhere sales amounts. Column B reports Minnesota property, payroll, and sales amounts. If you are not a unitary business, complete Columns A and B1.

If you are a unitary business, Column A must include the total sales of all corporations included on the combined return.

Column B1 is for the designated filer. The remaining columns are for each of the other corporations in the group having nexus with Minne-sota. If you need more than three columns, attach additional forms as needed.

Financial institutions, read Apportionment for Financial Institutions on page 14.

PropertyIn Column B1 (and remaining columns as needed by unitary business members having nexus with Minnesota), enter the property items for your business in Minnesota.

Line 1—InventoryAdd the beginning and ending year inventories and then divide by two. This is your average value of inventory for the tax year. Enter the result on line 1.

Line 2—Tangible Property and LandAdd the beginning and ending year values of total tangible property (real, personal, and mixed) used in connection with your business during the tax year and then divide by two. Property must be valued at original cost and includes land, buildings, machinery, equipment and other tangible personal property. Enter the result on line 2.

Line 3—Capitalized RentsCapitalized rents are based on the actual rent for property used during the tax year. Do not use an average of rents paid during the year to determine capitalized rents. Determine the value of rented property used by multiplying the rent paid for the tax year by eight.

PayrollLine 5—PayrollIn Column B1 (and the remaining columns as needed by unitary groups), enter your total payroll paid or incurred in Minnesota, or paid for labor performed in Minnesota, for the tax year in connection with the business.

SalesLine 6—Minnesota Sales or ReceiptsIn Column B1 (and in the remaining columns as needed by unitary business members having nexus with Minnesota) enter sales attributable to Minnesota made by the corporation listed at the top of the column. Financial institutions, see instructions on page 14.

The sales factor includes all sales, gross earnings or receipts received in the ordinary course of your business, except:• interest• dividends• sales of capital assets under IRC section 1221• sales of property used in the business, except sales of leased property that is regularly sold as well as leased• sales of stock or sales of debt instruments under IRC section 1275(a)(1) • intercompany sales between members of a combined return

Line 7—Unitary Businesses OnlyAll sales of a unitary business attributable to Minnesota must be included on the group’s combined return, regardless of whether a specific group member has nexus with Minnesota.

On line 7, enter all sales of the unitary business attributable to Minnesota that were not included on line 6. Report the sales in whichever B column most benefits you.

The sales reported on line 7 are also used to calculate the minimum fee. (MS 290.17, subd. 4[h])

Line 8—Total SalesIn column A, line 8, enter the total sales for the tax year. Eliminate any transactions between members included in the combined return. In Column B1 (and in the remaining columns as needed by unitary business members having nexus with Minnesota) add lines 6 and 7.

Determining Minnesota SalesReal PropertySales, rents, royalties and other income from real property are attributed to the state in which the property is located.

Continued

M4A Apportionment/Minimum Fee

13

Tangible Personal PropertySales of tangible personal property are attributed to Minnesota if the property is received by the purchaser within Minnesota, regardless of the f.o.b. point, other conditions of sale, or the ultimate destination of the property.

Tangible personal property delivered to a common or contract carrier or foreign vessel for delivery to a purchaser in another state or nation is a sale in that state or nation regardless of the f.o.b. point or other conditions of sale.

Property is received by a purchaser in Minnesota if the recipient is located in this state, even if the property is ordered from outside Minnesota.

Sales of tobacco products, beer, wine and other alcoholic beverages to someone licensed to resell the products only within the state of ultimate destination is a sale in the destination state.

Receipts from leasing or renting tangible personal property, including finance leases and true leases, are attributed to the state in which the property is located. Receipts from the lease or rental of moving property are attributed to Minnesota to the extent the moving property is used in Minnesota.

The extent of use is determined as follows:• A motor vehicle is used wholly in the state in which it is registered.• Receipts from rolling stock are assigned to Minnesota in the ratio of miles traveled in Minnesota to total miles traveled.• Receipts from aircraft are assigned to Minnesota in the ratio of landings in Minnesota to total landings.• Receipts from vessels, mobile equipment and other mobile property are assigned to Minnesota in the ratio of days the property is in Min-

nesota to the total days of the tax year.

Intangible PropertySales of intangible property are attributed to the state in which the property is used by the purchaser.

Royalties and other income received for the use of or privilege of using intangible property (such as patents, copyrights, trade names, fran-chises or similar items) are attributed to the state in which the property is used by the purchaser.

Intangible property is attributed to Minnesota if the purchaser uses the property, or rights in the property, to conduct business within this state, regardless of the location of the purchaser’s customers.

If the property is used in more than one state, then the sales or royalties must be apportioned to Minnesota pro rata based on the portion of use within this state.

If you cannot determine the portion of use in Minnesota, then exclude the sales or royalties from both the numerator and the denominator of the sales factor.

ServicesReceipts from the performance of services are attributed to the state in which the services are received.

Receipts from services provided to a corporation, partnership, or trust may only be attributed to a state in which it has a fixed place of doing business.

If you can’t determine where the service was received, or if it was received in a state where the corporation, partnership, or trust doesn’t have a fixed place of business, use the location of the office of the customer from which the service was ordered.

If you can’t determine the ordering office, use the office location to which the service was billed.

Petitioning to Use Another Method of AllocationState law (MS 290.20, subd. 1a and Minnesota Rules 8020.0100, subp. 3) allows entities to request permission from the department to allocate all, or any part of, taxable net income in a manner other than single-sales factor apportionment.

To request permission, complete Form ALT, Petition to Use Alternative Method of Allocation (see Revenue Notice 04-07).

Permission will be granted only if you can show that single-sales factor apportionment does not properly and fairly reflect your Minnesota income, and that the alternative formula you have chosen does.

Minimum FeeA corporation is subject to a minimum fee if the sum of its Minnesota source property, payroll and sales or receipts is at least $1,020,000. The minimum fee is in addition to the regular tax and the alternative minimum tax.

Entities that are exempt from the minimum fee include:• regulated investment companies (RICs)• real estate investment trusts (REITs)• real estate mortgage investment conduits (REMICs)

Line 10—AdjustmentsThe minimum fee is determined by your total Minnesota property, payroll and sales.

M4A Apportionment/Minimum Fee (continued)

Continued

14

Apportionment for Financial InstitutionsFinancial institution means:1) any corporation or other business entity registered• under state law as a bank holding company• under the federal Bank Holding Company Act of 1956, as amended• as a savings and loan holding company under the federal National Housing Act, as amended

2) any regulated financial corporation; or a national bank organized and existing as a national bank association pursuant to the provisions of United States Code, title 12, chapter 2

3) a savings association or federal savings bank as defined in United States Code, title 12, section 1813(b)(1)4) any bank or thrift institution incorporated or organized under the laws of any state5) any corporation organized under United States Code, title 12, sections 611 to 6316) any agency or branch of a foreign depository as defined under United States Code, title 12, section 31017) any corporation or other business entity that is more than 50 percent owned, directly or indirectly, by any person or business entity de-

scribed in clauses (1) to (6), other than an insurance company taxable under chapter 297I 8) a corporation or other business entity that derives more than 50 percent of its total gross income for financial accounting purposes from

finance leases. For the purposes of this clause, “gross income” means the average from the current tax year and immediately preceding two years and excludes gross income from incidental or occasional transactions. For purposes of this clause, “finance lease” means any lease transaction that is the functional equivalent of an extension of credit and that transfers substantially all the benefits and risks incident to the ownership of property, including any direct financing lease or leverage lease that meets the criteria of Financial Accounting Standards Board Statement No. 13, accounting for leases, or any other lease that is accounted for as financing by a lessor under generally accepted accounting principles

9) any other person or business entity, other than an insurance company that derives more than 50 percent of its gross income from activities that an entity described in clauses (2) to (6) or (8) is authorized to transact. For the purposes of this clause, gross income does not include income from nonrecurring, extraordinary items

Financial institutions complete Form M4A the same way that other corporations would, with the exception of lines 6 and 7.

M4A Lines 6 and 7—Sales or Receipts FactorFinancial institutions use a receipts factor instead of a sales factor.

Include the gross income from activities in the ordinary course of business, including income from securities and money market instruments.

The following are considered Minnesota income: • interest income from loans secured by real or tangible personal property located in Minnesota • interest on consumer loans not secured by real or tangible personal property if the borrower is a Minnesota resident • interest on commercial loans not secured by real or tangible personal property if the proceeds are applied in Minnesota• merchant discount income if the merchant is located in Minnesota • receipts from travelers checks if purchased in Minnesota • receipts from credit cards if regularly billed in Minnesota• receipts for regulated financial institutions from securities, based on the ratio of total deposits from Minnesota to total deposits in and out-

side Minnesota • receipts for nonregulated financial institutions from securities, based on the ratio of gross business income from Minnesota to total gross

business income• receipts from secondary market assets treated in the same way as securities• receipts from the performance of services received in Minnesota

In some cases the property, payroll and sales used for computing the minimum fee will be different than those used for apportionment. The following adjustments should be made to your Minnesota factors on line 10.

Add: All tangible property owned or rented that is not included on line 4 of Form M4A. Some examples include construction in progress, idle property and any nonbusiness property or rent expense. The amounts should be determined in the same manner as the amounts on line 4.

Subtract:• Any partnership amounts included on lines 4, 5 and 8.• Reduction of property owned for a short taxable year. To determine, multiply the amount included on line 1 and line 2 for that property by

a fraction: the numerator is 365 minus the number of days in the tax year; the denominator is 365.Enclose a schedule showing the computation and pass-through information of any adjustments listed on M4A, line 10.

M4A Apportionment/Minimum Fee (continued)

15

Each corporation must have a Minnesota tax ID number. When entering the corporation’s name, use the same abbrevia-tion used on M4A.Line 1Enter the amount from line 9 of Form M4I in each column. Do not divide the amount between columns.

Line 4—Minnesota Nonapportionable Income Enter any income from Form M4I, line 8, that is assigned to Minnesota and attach a schedule. Include the Minnesota nonapportionable in-come you received as a partner in a partnership reported on line 1 of Schedule KPC.

Line 6—Net Operating Loss DeductionYou must limit your net operating loss deduction to 80% (0.80) of line 5 (taxable net income).

A net operating loss incurred in a prior year and not previously used to offset net income may be deducted on line 6. Complete and attach Schedule NOL, Net Operating Loss Deduction.

Acquired Net Operating Losses: Acquired net operating losses are subject to limitation as determined under IRC section 382(g). See Rev-enue Notice 17-09 Corporate Franchise Tax – Net Operating Loss Carryforwards – Sinclair Broad. Grp., Inc. v. Comm’r of Revenue.

Unitary businesses only: A separate NOL schedule is required for each corporation claiming a net operating loss deduction.

Line 8—Dividends Received DeductionComplete and attach Schedule DIV, Deduction for Dividends Received.

Line 11—Alternative Minimum Tax Complete and attach Schedules AMTI, Alternative Minimum Tax, Calculation of Income, and AMTT, Alternative Minimum Tax, Calculation of Tax, if your Minnesota net income (Form M4I, line 7) combined with your adjustments and tax preferences (including adjusted current earnings) exceeds $40,000 or your allowable exemption amount.

Line 13—AMT Credit Complete and attach Schedules AMTI and AMTT to claim the AMT carryover credit.

Line 15—Minnesota Research CreditComplete and attach Schedule RD, Credit for Increasing Research Activities, to claim credit for research and development expenses.

Your credit is limited to the regular franchise tax or the liability for tax, whichever is less.

Include any research credit you received as a partner in a partnership reported on line 20 of Schedule KPC.

Unitary businesses only: A separate Schedule RD is required for each corporation claiming this credit.

Line 19—Tax Credit for Owners of Agricultural AssetsEnter the amount of credit you received from a partnership on Schedule KPC line 15. Do not enter more than the amount on Form M4T line 14. If the credit you received is more than the tax liability on Form M4T line 14, the excess may be carried forward up to 15 years. Attach a copy of Schedule KPC showing the credit you received to your return.

Line 21—Employer Transit Pass CreditIf you purchase transit passes to sell or give to your employees, you may be eligible for this credit. The credit is 30 percent of the differ-ence between the price you paid for the passes and the price charged employees. Complete and attach Schedule ETP, Employer Transit Pass Credit.

Include any credit you received as a partner in a partnership reported on line 23 of Schedule KPC.

M4T Tax Calculation

Use this mailing label on your own envelope to mail your Form M4 and copies of your federal return and schedules. (Cut on the dotted line and tape to your envelope.)

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Federal Adjustments for Businesses for Tax Year 2019

Under current law, definitions used in determining Minnesota taxable income are based on the Internal Revenue Code (IRC), as amended through December 31, 2018 (2018 IRC). Since that date, Congress has enacted the following:

• Taxpayer Certainty and Disaster Tax Relief Act (TCDTR) of 2019• Families First Coronavirus Response Act (FFCRA) of 2020• Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020• Paycheck Protection Program Flexibility Act (PPPFA) of 2020

These acts contain changes affecting businesses for tax year 2019. Because Minnesota has not adopted these federal changes, adjustments are required to correctly determine your Minnesota taxable income. Use the following instructions to calculate nonconformity adjustments relating to the TCDTR, FFCRA, CARES Act, and PPPFA.

How to Report the Federal AdjustmentsIf any of the federal provisions that are included in the TCDTR, FFCRA, CARES Act, and PPPFA affect the amount of taxable income reported on your 2019 federal Form 1120, U.S. Corporation Income Tax Return, you must make an adjustment to income on your 2019 Minnesota return. To determine the adjustment amount, compute your federal taxable income based on 2018 IRC. Report the difference between this amount and the amount allowed on your federal return as an adjustment to income.

Certain CARES Act provisions must be reported on the following lines:

• Form M4I, line 1b - Section 2306 Modification of Business Interest Limitation

Subtotal all remaining nonconformity adjustments (positive and negative) calculated from the provisions listed below. If the net of all adjustments results in an increase of your federal taxable income (FTI), enter the net adjustment as a positive number on line 2i of Form M4I. If the net of all adjustments results in a reduction of your FTI, enter the net adjustment as a positive number on line 4o of Form M4I. For purposes of calculating adjustments, use any federal regulation or ruling issued by the Internal Revenue Service prior to the passage of the TCDTR, FFCRA, CARES Act, and PPPFA which governs the referenced provisions.

To report the differences for Minnesota tax purposes, you must attach to your Form M4 a list of the federal provisions affecting your taxable income by act and section number and show how you calculated each adjustment amount.

If you amended your 2019 federal return solely due to the TCDTR, FFCRA, CARES Act, or PPPFA, your Minnesota adjustment will offset the change to your federal taxable income. For these amended returns, write “TCDTR”, “FFCRA”, “CARES Act”, and/or “PPPFA” (all that are applicable) in red at the top of the Minnesota Form M4X.

Provisions that May Require an Income AdjustmentThe following provisions may require an income adjustment for Minnesota tax purposes. This list includes the most common adjustments; you must make adjustments as described above for all provisions included in the TCDTR, FFCRA, CARES Act. and PPPFA.

TCDTR SectionsSection 111. Indian Employment CreditNo nonconformity adjustment is needed because Minnesota requires a subtraction on line 4c of the Minnesota Form M4I.

Section 112. Railroad Track Maintenance CreditNo nonconformity adjustment is needed because Minnesota requires a subtraction on line 4c of the Minnesota Form M4I.

Section 113. Mine Rescue Team Training CreditIf you were not allowed to deduct expenses due to the Mine Rescue Team Training Credit on your federal return, include the amount of the disallowed expenses as a negative number.

Section 114. Classification of Certain Race Horses as 3-year PropertyIf you own race horses and you claimed a 3-year recovery period on your federal return, calculate the difference between the 3-year recov-ery period and the recovery period you would have been allowed under 2018 IRC. If your recovery period reported on your federal return is greater than the recalculated amount, include the amount as a positive number. If your recovery period reported on your federal return is less than the recalculated amount, include the amount as a negative number.

Section 115. 7-year Recovery Period for Motorsports Entertainment ComplexesIf you have a motorsports entertainment complex and you claimed a 7-year recovery period on your federal return, calculate the difference between the 7-year recovery period and the recovery period you would have been allowed under 2018 IRC. If your recovery period reported on your federal return is greater than the recalculated amount, include the amount as a positive number. If your recovery period reported on your federal return is less than the recalculated amount, include the amount as a negative number.

Section 116. Accelerated Depreciation for Business Property on Indian ReservationsIf you have qualified Indian reservation property and claimed accelerated depreciation, calculate the depreciation you would have been allowed under 2018 IRC. If your depreciation reported on your federal return is greater than the recalculated amount, include the difference as a positive number. If your depreciation reported on your federal return is less than the recalculated amount, include the difference as a negative number. Continued

17

Section 117. Expensing Rules for Certain ProductionsIf you were allowed to deduct instead of capitalize expenditures related to a qualified film, television, and theatrical productions on your federal return, subtract the capital expenditures allowed under 2018 IRC from the amount deducted on your federal return, and include that difference as a positive number.

Section 118. Empowerment Zone Tax IncentivesIf you had a tax change relating to an empowerment zone that impacted your FTI on your federal return, reverse the tax impacts to your FTI.

Section 122. Second Generation Biofuel Producer CreditIf you claimed the Second Generation Biofuel Producer Credit on your federal return that impacted your FTI, reverse the tax impacts to your FTI.

Section 124. Qualified Fuel Cell Motor VehiclesIf you claimed the credit for Qualified Fuel Cell Motor Vehicles on your federal return that impacted your FTI, reverse the tax impacts to your FTI.

Section 125. Alternative Fuel Refueling Property CreditIf you claimed the Alternative Fuel Refueling Property Credit on your federal return, adjust the property’s basis without regard to the basis reduction required under current federal law. Include any adjustments to FTI as a result of this Minnesota change in basis.

Section 126. 2-Wheeled Plug-in Electric Vehicle CreditIf you claimed the 2-Wheeled Plug-In Electric Vehicle Credit on your federal return, adjust the vehicle’s basis without regard to the basis reduction required under current federal law. Include any adjustments to FTI as a result of this Minnesota change in basis.

Section 129. Energy Efficient Homes CreditIf you claimed the Energy Efficient Homes Credit on your federal return, adjust the property’s basis without regard to the basis reduction required under current federal law. Include any adjustments to FTI as a result of this Minnesota change in basis.

Section 130. Special Allowance for Second Generation Biofuel Plant PropertyIf you were allowed to deduct the additional first-year 50-percent bonus depreciation for cellulosic biofuel facilities on your federal return, include the additional depreciation as a positive number.

Section 131. Energy Efficient Commercial Buildings DeductionIf you claimed an energy efficient commercial buildings deduction on your federal return that impacted your FTI, reverse the tax impacts to your FTI.

Section 132. Special Rule for Sales or Dispositions to Implement FERC or State Electric Restructuring Policy for Qualified Electric UtilitiesIf you elected to recognize gain from qualifying electric transmission transactions ratably over an eight-year period on your federal return, include the amount of the deferred gain as a positive number.

Section 203. Employee Retention Credit for Employers Affected by Qualified DisastersIf you were not allowed to deduct wages due to claiming the Employee Retention Credit on your federal return, include the amount of the disallowed wages as a negative number.

Section 204(a). Temporary Suspension of Limitations on Charitable ContributionsIf your federal deduction for charitable contributions exceeds the deduction allowed under 2018 IRC, include the excess as a positive number.

FFCRA SectionsSection 7001. Employer Credit for Paid Medical LeaveIf you were not allowed to deduct wages due to claiming the Employer Credit for Paid Medical Leave on your federal return, include the amount of the disallowed wages as a negative number.

Section 7003. Employer Payroll Credit for Required Paid Family LeaveIf you were not allowed to deduct wages due to claiming the Employer Payroll Credit for Required Paid Family Leave on your federal return, include the amount of the disallowed wages as a negative number.

Federal Adjustments for Businesses for Tax Year 2019 (continued)

Continued

18

CARES Act SectionsSection 1106. Paycheck Protection ProgramIf you claimed Paycheck Protection Program loan forgiveness on your federal return, take the amount that was excluded from gross income for federal purposes and subtract the amount that would have been deductible as a business expense if you had not claimed the loan forgiveness treatment. Include the amount as a positive number.

Incorporate the modifications included in the PPPFA in the above described adjustments made as a result of Section 1106 of the CARES Act.

Section 2205. Charitable Contribution Deduction Limitation Increased If your federal deduction for charitable contributions exceeds the deduction allowed under 2018 IRC, include the excess as a positive number.

Section 2206. Exclusion for Employer Payments of Student LoansIf you were not allowed to deduct business expenses as a result of this provision on your federal return, include the amount of the disallowed employee student loan payments as a negative number.

Section 2301. Refundable Credit for Employer Equal to 50% COVID WagesIf you were not allowed to deduct wages due to claiming the refundable payroll tax credit on your federal return, include the amount of the disallowed wages as a negative number.

Section 2306. Modification of Business Interest LimitationIf your business interest expense deduction exceeds the sum of 30% of your adjusted taxable income, your business interest income, and your floor plan financing interest, and/or your combined group is different from your federal consolidated group, see instructions on page 8 for line 1b of Form M4I.

Section 2307. Qualified Improvement Property Technical FixIf you claimed federal bonus depreciation on qualified leasehold improvement property, qualified restaurant property, or qualified retail improvement property, determine the difference between the federal bonus depreciation you claimed on this property and the cost recovery deduction or expensing method you would have been able to claim prior to the CARES Act, this may include a Minnesota modification for section 179 expensing. Include the result as a positive number.

If you filed an amended federal return increasing your federal bonus depreciation as a result of this provision of the CARES Act, do not adjust your Minnesota addition for bonus depreciation on line 2g of Form M4I.

If you claimed bonus depreciation on this property on your 2018 return and made an adjustment on your 2018 Schedule M4NC to addback the amount not allowed for Minnesota purposes, you may calculate the depreciation you would have been able to claim prior to the CARES Act for 2019. Include this amount as a negative number.

Federal Adjustments for Businesses for Tax Year 2019 (continued)